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After Facebook Marketplace, What's eBay's Next Move?

Though companies like eBay Inc. (EBAY - Free Report) and Etsy (ETSY - Free Report) are well established players in the e-commerce space and also have a first mover advantage, it appears that Facebook, Inc.(FB - Free Report) is slowly trying to explore the space. Very recently, it unveiled Facebook Marketplace that allows users to buy and sell items within their local communities.

This facility is already available through its “Groups” feature but the company is gradually enhancing its functionality to enhance the transaction experience.

Undoubtedly, e-commerce, with a large user base worldwide, has turned out to be a sweet spot and the additional advantage that Facebook has is its huge user base. The company stated that over 450 million people buy and sell groups on its site each month.

Facebook’s accelerating push in to the peer-to-peer e-commerce market is a posing a threat to eBay but we believe that the impact will not be significant, given eBay’s scale, brand awareness and advanced e-commerce capacities, at least in the short term.

eBay’s Unique Capabilities

eBay has introduced several measures to fuel growth in its Marketplaces business. It now offers a local feature that allows a customer to buy something online and then pick it up at a local store at their convenience. Aside from increased customer satisfaction owing to the added choice, it lowers shipping costs.

The other initiative involves a “discovery” feature, wherein eBay sellers can create a collection of items for customers to discover. Additionally, eBay continues to increase user engagement and satisfaction by driving traffic to its top-rated sellers. As a result, same store sales at these retailers continue to grow at a healthy rate. The company expanded the use of social channels, which is significantly increasing traffic growth.

eBay’s Classifieds portfolio provides a very important way to capture the local customer-to-customer opportunity, which often represents customers who are selling items more suited to a local transaction.

Revamping Seller Policies

eBay continues to revamp seller policies to help small- and medium-sized sellers and better reward those who provide quality service to buyers. The company is also allowing sellers to tailor the way they manage returns based on their specific business needs with as much involvement from eBay as they desire.

It has launched a Seller hub, which puts sellers listing and marketing tools, along with deep data insights and selling recommendations, at one central place. The platform allows professional sellers to manage end-to-end business on eBay. It also focuses on areas designed to drive more engagement from consumer sellers. For instance, the company is expanding its intermediated selling service, eBay Valet.

In comparison Facebook’s Marketplace is still at a beta stage and a lot remains to be done before it can contend with market leaders. Considering eBay’s strong position and unique capabilities in the space and Facebook’s previous failures with similar attempts, we don’t find any reason for eBay to worry at least in the near term.

In its efforts to deliver a more robust commerce platform, eBay is building a solid foundation of structured data through a three-pronged approach. The company has started gathering product data from sellers’ inventory list.

eBay uses machine learning to process that data to improve user experience. Getting a product identifier is very helpful after the company associates that product information to similar products. The company is planning to acquire SalesPredict in order to strengthen its effort toward artificial intelligence, machine learning and structured data. The company has also announced the acquisition of Ticketbis to expand StubHub beyond North America to Europe, Asia Pacific and Latin America.

Linkedin has seen estimates for the full year rise over the past 60 days by more than 100%.

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